We Thought This Would Be Fun, Boy Were We Wrong: A tale about Government ERP Implementations

ERP implementations are difficult to successfully pull off. Recent reports and studies illustrate that almost half of ERP implementations fail. Piling onto that statistic, Federal, State, and Local Governments seem to struggle with ERP implementations. According to reports from Gartner, Peerstone, Standish, and Accenture:

• 40% of ERP implementations in Federal, State, and Local Governments exceeded schedule and budget.
• 15% of large Federal implementations were failures.
• Less than 30% of Government Organizations would recommend their ERP vendor to another organization.
• 50% of the ERP failures occur in the public sector although the public sector accounts for only 20% of the ERP market.[1]

Some experts liken an ERP implementation to a marathon, and I think that is an apt analogy. Like a marathon, a successful ERP implementation requires discipline, dedication, and time to train. As difficult as ERP implementations are in the private sector, public sector implementations are more than just the Rock and Roll Marathon in San Diego. Government ERP projects, particularly in the Department of Defense, resemble the Badwater race through Death Valley. Government projects have more difficulties due to the nature of government and require much more understanding, planning, determination, and patience.

I think is vital to view this issue through the government’s eyes. I am not blaming government at any level for difficult implementations. It is just a fact that the government operates differently than the public sector and it is critical to understand and accommodate those differences. First, all they have heard for the past 11 years have been budget cuts, taxpayer dissatisfaction because government is not as efficient as Amazon, and “doing more with less.” Due to a turbulent political climate and shrinking budgets, governments at all levels tend to be incredibly resistant to change. Like most of us, they prefer to perform with more stability and predictability and the devil you know is preferred to a new one. ERP implementations are viewed as an unknown. Although a successful ERP implementation can deliver efficiency, stability, and predictability, it is only after an intense implementation and shakedown period. Kind of like Marine Corps boot camp.

The first step to a successful ERP implementation in any sector is to set realistic goals and validate them. Public organizations should focus on having a realistic (I truly mean realistic!) budget, schedule, and scope. While government is not a business, sometimes business rules apply. This is one of those times. Stakeholders and decision-makers must be comfortable with the business case, the program managers must concur that the Return on Investment (ROI) is reasonable and achievable. Allowing the vendors or consultants to overpromise is the first step on the road to perdition. Ask the right questions upfront and stay true to your achievable goals and do not be afraid to say no. Program managers and contracting agents need to be on the lookout for proposals that are too good to be true. There is a cost to implement an ERP system and the government should be wary of proposals that stray too far from the average cost for different kinds of services. Another view from many government employees is that their old ways and systems seem to be working fine. Asking them to abandon a comfortable routine for a new system that will be “new and better” is a tough sell and something they have heard many times.

Change Management is exceedingly important to public sector ERP implementations, yet it is the first thing that leadership slices from the ERP budget. The most cited factor for public sector ERP success or failure is organizational change management.[2] Speaking from my own experience as an end-user during a government ERP implementation, lack of change management is a key contributor to the implementation failing. I know you have heard this many time, but an ERP software selection and implementation are much more than software and hardware. It is mostly about the peopleware – a large, but understated, portion of any software project is employee buy-in and adoption. At the end of the day, it does not matter what software is selected and implemented if the employees refuse to use it and create their own workarounds outside the system. Your ERP consultant should include tasks that ensure your employees understand what is going on, why you are doing it, when it will happen, provide multiple avenues for feedback, and foster positive communication. When employees are asked to contribute to the project, they are part of it and are less likely to criticize or reject it.

The way to mitigate these risks, however, does not include budget cutting in the very areas that need resources the most. I have never seen an ERP implementation that downsized itself to greatness. ERP implementation risk mitigation strategies should involve taking the time upfront to develop and fund a strong, solid ERP strategy and plan that addresses the following key principles:

• organizational change management
• business risk
• key and unique business and functional requirements
• project governance
• efficient future state processes, and
• a strong business case that outlines all benefit realization opportunities, and the time expected to achieve results.

I do not mean to imply that government ERP implementations are impossible. Indeed, nothing is impossible when you work for the circus! Public sector ERPs just require another level of planning, communication, and accountability. With the proper planning, firm support from key stakeholders, and a trail boss like LTA to guide your journey, your chances for success are multiplied an order of magnitude. Contact the ERP experts at LTA today and take the first step towards an optimized future!

[1] Kanaracus, Chris, “The 6 worst IT project disasters of 2013,” PC World, December 10, 2013, available online http://www.pcworld.com/article/2071520/the-worst-it-project-disasters-of-2013.html, accessed December 17, 2019.

[2] Beal, Jason and Prabhakar, Bipin, “Readings on Enterprise Resource Planning, Chapter 20: Public sector ERP,” ERPsim Lab, HEC Montréal , p. 299.